If the nominal interest rate per year is 10% and the inflation rate is 4%,what is the real rate of interest?
A)10.0%
B)4.1%
C)5.8%
D)14.0%

Name: If the nominal interest rate per year is 10% and the inflation rate is 4%,what is the real rate of interest? A)10.0% B)4.1% C)5.8% D)14.0%
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Question

Quizplus · Accepted Answer

Real rate of interest = Nominal rate - Inflation rate
Real rate of interest = 10% - 4%
Real rate of interest = 6%
Therefore, the real rate of interest is 6%, which is option C.

If the Nominal Interest Rate Per Year Is 10% and the Inflation